Monitoring Home: Dropcam and Nest Unite Under the Google Banner

We’re one step closer to the smart home. Nest, a smart thermometer which functions by learning its owners’ habits—when they’re away from home, when they’re active or inactive— has been hugely successful as the thinking, energy-saving eyes inside the home. By learning residents’ behavior, the thermostat automatically adjusts to suit the needs of the homeowner.

Credit: Amazon

Despite claims in an earlier lawsuit that heating in the thermostat’s base created errors in reading temperature, Nest is increasingly popular, so much so that the little startup superstar was acquired by Google, for $3.2 billion only four months ago.

Google’s most recent massive purchase, reported Re/code, is Dropcam. The products seem like a perfect cocktail—albeit one that cost $555 million to bring together— for home efficiency and security.

Helping People Stay Connected

Dropcam is essentially a very popular security camera. Although it has never revealed its sales numbers, Re/code reported that Dropcam repeatedly appeared as a top-selling security device on Amazon. As Forbes described it, Dropcam produces user-friendly, Wi-Fi webcams and trackers, through which the owner can access data and video from their home, essentially anywhere with an Internet connection.

“We both think about the entire user experience from the unboxing on,” Nest co-founder and VP Matt Rogers told Re/code in an interview. “We both care deeply about helping people stay connected with their homes when they’re not there.”

However, Dropcam is not simply a camera company though. A large aspect of its business is charging consumers to store up to one week of video at a time online, in a neatly-named Dropbox parallel. According to All Things D’s profile of Dropcam, “It’s a fascinating company that sells gobs of $149 Wi-Fi cameras that people use for everything from surveilling their own homes for security purposes to ensuring they have video of their kids’ first steps.”

Big Profits, Small Operation

Dropcam co-founders Aamir Virani and Greg Duffy, two Texan software engineers who met while working on email app startup Xobni, launched their hardware startup in 2009. Today their small company is much the same, except for their spectacular level of success. With millions of dollars in revenue per year, according to All Things D, the company still operates on its original, minute-scale, at least in terms of personnel. Unbelievably, for a company that is “fairly certain that it processes more video than YouTube per day,” to quote All Things D, it still only boasts 23 employees, operating out of San Francisco and Shenzhen.

Big Brother Google?

The online storage aspect of surveillance, though, has sparked tremors of hesitation, especially in light of this conglomeration of online storage of home surveillance under Google’s watchful eye. Nest monitors activity patterns, reporting who, when, and where activity happens in the house on a regular basis, also storing and interpreting that data.

Here the Orwellian concerns do not sound too far-fetched. The idea of a Google Big Brother peeking through the ever-present camera is causing some predictable ripples among potential consumers.

Predictable as the concerns are, it is unsurprising that Rogers tried to quell them in the same swoop as making the deal public. In the blog post in which he reported the acquisition, he soothed readers. “Like Nest customer data, Dropcam will come under Nest’s privacy policy, which explains that data won’t be shared with anyone—including Google—without a customer’s permission,” Rogers said in a blog post. “Nest has a paid-for business model and ads are not part of our strategy. In acquiring Dropcam, we’ll apply that same policy to Dropcam too.”

“With Dropcam, it’s the individual who chooses to share,” Duffy commented to Re/code in 2013. “That helps keep it from being weird and dystopian.”

Lingering Questions

Those gentle reassurances were not enough apparently to prevent Forbes running the headline, “Google Nest Labs’ Acquisition of Dropcam Scares the Heck Out Of Me.” Forbes voices its concern over the complete data-picture of our lives that smarter-than-thou devices collect on a day-to-day basis. However, they acknowledge that the ability to be able to remotely control and monitor your house while out and about sounds fundamentally super useful.

According to Forbes, inviting Dropcam, and hence Google, into your house— in addition to all the data Google already has access to via Chrome and Gmail—is synonymous with giving Google the ability to “listen in on activities in your home, not to mention check out video feeds at will.” Nest, for all these concerns, is not as much “Google Nest” as Forbes makes it out to be. Nest preserves a level of independence, as Fool.com expressed it, “a wholly owned stand-alone brand.” Nest, as per its privacy policy, will not be sharing the data with Google, as Rogers stated. Not to say that the very fact that all this data exists even potentially within Google’s reach isn’t troubling, but it is also worth noting that Nest itself was the target of similar concerns when it was acquired by Google. This is despite the company’s evident ability to preserve a relative level of independence.

Smart Home Potential

The most devious aspect of this deal might be, as the International Business Times speculated, the attempt by Google to “gain an early edge in the fast-growing ‘smart home’ segment’” where it is in competition with familiar titans like Apple.

Nest’s acquisition of Dropcam, alongside iPhone’s HomeKit, which allows for remote control of household lights, garage doors, etc., and LG’s HomeChat, which homeowners can use to control LG home appliance settings, is bringing the smart home out of the sphere of hobbyists and enthusiasts and one step closer to mainstream production.